Analysis of the four elements of the foreign exchange market: time, market, currency, and events

When writing narrative essays as a child, teachers often emphasized the four elements of time, place, characters, and events. map toforeign exchange marketWe can also sort out four dimensions: time period, trading market, active currency, and important events. Let's talk about these four elements today.

The following is detailed from several aspects.

1. The foreign exchange market is a 24-hour market

The foreign exchange market is unlike stocks in that global traders trade the same financial product.

The development of Information Communication Technology has greatly facilitated financial marekting, and on-floor outcry trading has gradually been replaced by 24-hour electronic trading. Almost all major financial assets can now be traded nearly 24/7 anywhere in the world, but only the foreign exchange market really has continuous trading characteristics, because traders around the world trade the same product.

Taking stocks as an example, most stocks are traded on local exchanges, such as Shanghai and Shenzhen class A shares, the Tokyo Stock Exchange, Paris Bourse, the New York Stock Exchange, etc. These markets mainly trade stocks of domestic companies, and traders are mainly local. Trading hours are basically limited to opening and closing hours.

And at any given moment, there is always a broker somewhere in the world who can provide two-way quotes. For example, platforms like BCR Forex can continuously provide a 24/7 quote service.

Forex trading is different. It is a 24-hour market. There are always dealers around the world who can provide two-way quotes at any time. For example, Citibank is headquartered in New York, but has branches in nearly 150 countries and regions around the world, constantly providing two-way foreign exchange quotes. In addition to large investment banks, there are also local dealers quoting outbound at every time period.

Trading in the foreign exchange market is more concentrated.

Forex trading is a global market and is highly influenced by global information. Traders need to access information from around the world 24/7 and develop trading strategies accordingly.

As a result, each bank and market maker sets upper and lower limits on overnight positions in their trading rooms to control risk. The workhorses of the three major markets usually position squaring based on judgment before the market closes, which makes the foreign exchange market very concentrated, with sharp and one-step price movements. [Note: The three major markets are: New York (and Chicago), London, Tokyo (and Singapore) ]

2. The "four elements" of the foreign exchange market (time, market, active currencies, events)

The world's three main foreign exchange markets are New York (and Chicago), London, and Tokyo (and Singapore), and these three markets interact with each other. For example, profit selling in the first two markets is often reflected in the third market; likewise, if the first two markets continue to decline, the third market may rebound.

For example, the big players in New York are seriously trapped and may not settle on the spot to avoid further depressing the exchange rate, but wait for the opening of the New Zealand, Sydney and Tokyo markets to gradually unwind according to the situation.

The foreign exchange transactions in the three major markets have their own characteristics, which are mainly determined by the local trade situation, foreign exchange demand, and the game between the main market players. Investors can observe and operate these market characteristics on platforms such as BCR Foreign Exchange.

The specific features are as follows:

1. Asian and American markets tend to trade JPY/USD because the Asian session is when Japanese business activity and economic data are released, while the American market is due to the large volume of US-Japan trade.

2. During the European market session, we mainly trade euros, pounds, and dollars, and conduct trading operations on the cross exchange rates of major currencies.

3. The American market is the most important time period for the global foreign exchange market, with major currency transactions being very active. At the same time, transactions in "emerging currencies" are basically concentrated in this time period.

4. Refinement at each time of the day

Session 1: Light Asian markets in the morning (8:00-12:00). During this time, the Japanese market opens, followed by Asian markets such as Hong Kong and Singapore. If there is a major market, Japanese and American foreign exchange traders will intervene in New Zealand and Sydney in advance. For example in BCRForex PlatformAt this time, you can keep an eye on the movements of currency pairs such as the Yen/USD pair.

8:00 to 9:00 is the opening time in Japan, linking the past and the future. It may be a pullback from the previous trading day, or it may be the beginning of a new trend. There are many fake moves, and it is easy to be deceived and not suitable for operation at this time.

9:00~ 10:00 One hour after the Japanese market opened, the market gradually became clear, making it more suitable for trading.

Second session: 12:00 noon to 2:00 pm

Japanese market players often attack at this time, until 3:00 pm position squaring is completed, most of Hong Kong's big players follow suit.

The third segment: Afternoon (14:00-18:00) The European morning market has a moderate shock, which is the main trading period from the opening of London to the morning. The euro and various European currencies are actively traded.

13:00~ 15:00 After the end of the first day of the market, after the overnight trend, the market has been corrected in place, conforming to the trend of the previous trading day, and the effect is very good.

15:00~ 17:00 is similar to 13:00~ 15:00, but the time is later, the price may be slightly different, and you can still enter the market.

From 17:00 to 19:00, the price is not good, and the European market opens early, which is easily disrupted by intraday pullbacks or disputes.

19:00~ 20:00 Before the release of the first wave of US data, the entry at this time was similar to a bet, but the effect was poor.

The fourth paragraph: Evening (20:00-24:00) European afternoon trading and American morning trading fluctuated sharply

20:00~ 21:00 After the release of the first wave of data in the United States, you can choose the opportunity to enter the market, and the effect is satisfactory.

22:00~ 23:00 Before the release of the second wave of US data, the entry at this time was similar to a bet, but the effect was poor.

23:00~ 24:00 After the release of the second wave of data in the United States, you can choose the opportunity to enter the market, and the effect is satisfactory.

The fifth paragraph: Late night (00:00-3:00 am) is the main time when the London market closes and the big players in New York make market moves.